Kroger and Albertsons will sell 413 stores across 17 states and the District of Columbia, along with eight distribution centers, two offices and five private label brands, to C&S Wholesale Grocers for approximately $1.9 billion in cash. The $24.6 billion Kroger-Albertsons merger, first announced in October 2022, had been planned with store divestitures in mind, but the specific number to be sold and their locations had not yet been determined.
The two chains already have created a common website, Kroger Albertsons, and said the merger is on track to close in early 2024, subject to regulatory clearances and other closing conditions.
The majority of stores to be sold are on the West Coast, including 104 Albertsons and Kroger stores in Washington State, 66 in California, 52 in Colorado and 49 in Oregon.
As part of the agreement, C&S has agreed to maintain collective bargaining agreements at the facilities it will acquire, securing the future of union jobs. In May 2023 the United Food and Commercial Workers (UFCW) union had voted to oppose any mergers.
“C&S is led by an experienced management team with an extensive background in food retail and distribution and has the financial strength to continue investing in associates and the business for the long run,” said Rodney McMullen, Chairman and CEO of Kroger in a statement. “Importantly in our agreement, C&S commits to honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth.”
Kroger also released results for its 2023 Q2, which ended Aug. 10, 2023. The retailer generated $33.9 billion in sales, down 2% from $34.6 billion during the same period in 2022. Excluding fuel sales, same-store sales grew 1.1% compared to Q2 2022.
Included in Kroger’s results was a $1.4 billion charge related to a nationwide opioid settlement framework that will be paid out over 11 years. Kroger said the settlement and payment terms would not affect the merger.